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American law holds it to be inequitable, regardless of fraud, to allow another to be enriched by expenditures made on land by one who supposed himself, in good faith, to be the owner. It is inequitable for one to profit by another's innocent mistake; the fact that the owner needs no relief and seeks none, ought not to bar plaintiff's right in equity.
Plaintiffs, a husband and wife, made extensive improvements to the defendant owner’s property because they mistakenly thought they had purchased the property. In fact, they had purchased a different lot in the same development. When plaintiffs learned of the mistake, they surrendered possession. Because the defendant owner refused to reimburse them, plaintiffs filed suit. The owner alleged that because plaintiffs voluntarily surrendered possession of the premises, they could not recover for the improvements pursuant to the Missouri betterments statute, Mo. Rev. Stat. § 524.160 (1949). The trial court entered judgment for the owner. Plaintiffs appealed.
Under the circumstances, could the plaintiffs maintain an action in equity for the improvements they made to the defendants’ property?
On appeal, the court reversed and remanded. The court held that under American law, it was inequitable, regardless of fraud, to allow another to be enriched by expenditures made on land by one who supposed himself, in good faith, to be the owner. It was inequitable for one to profit by another's innocent mistake. The court determined that plaintiffs could pursue an action in equity so long as the betterments statute did not prohibit the suit. The court concluded that the betterments statute, § 524.160, did not, by direct language or by implication, preclude suits not within its terms.